HB 1596 - Revenue Code; conform to federal code; tax credits

First Reader Summary

A BILL to amend Title 48 of the Official Code of Georgia Annotated, relating to revenue and taxation, so as to revise provisions relating to Georgia taxes; to define the terms "Internal Revenue Code" and "Internal Revenue Code of 1986" and thereby to incorporate provisions of federal law into Georgia law; and for other purposes.

Page Numbers - 1/ 2/ 3/ 4/ 5/ 6/ 7

Code Sections - 48-7-40.15

HB 1596                                            HB 1596/AP 
 
      H. B. No. 1596 (AS PASSED HOUSE AND SENATE) 
      By:  Representatives Buck of the 135th, Royal of the 164th, 
      Jamieson of the 22nd, Skipper of the 137th and Day of the 
      153rd and others 
 
                        A BILL TO BE ENTITLED 
                               AN ACT 
 
 
  1- 1  To amend Title 48 of the Official Code of Georgia Annotated, 
  1- 2  relating to revenue and taxation, so as to revise provisions 
  1- 3  relating to Georgia taxes; to define the terms "Internal 
  1- 4  Revenue Code" and "Internal Revenue Code of 1986" and 
  1- 5  thereby to incorporate provisions of federal law into 
  1- 6  Georgia law; to provide that terms used in the Georgia law 
  1- 7  shall have the same meaning as when used in a comparable 
  1- 8  provision or context in federal law; to provide for other 
  1- 9  matters related to the foregoing; to extend a certain tax 
  1-10  exemption for certain businesses in less developed counties; 
  1-11  to increase the carry-forward period for tax credits for 
  1-12  existing manufacturing and telecommunications facilities or 
  1-13  support facilities in tier 1, 2, and 3 counties; to provide 
  1-14  for a carry-forward period for tax credits for certain 
  1-15  retraining programs; to provide for income tax credits for 
  1-16  the purchase or lease of a new low-emission vehicle or the 
  1-17  conversion of a conventionally fueled vehicle; to provide 
  1-18  for definitions and the terms, conditions, limitations, and 
  1-19  procedures relating to such credits; to provide for powers, 
  1-20  duties, and authority of the state revenue commissioner, the 
  1-21  Board of Natural Resources, and the Environmental Protection 
  1-22  Division of the Department of Natural Resources with respect 
  1-23  to the foregoing; to provide for effective dates and 
  1-24  applicability; to repeal conflicting laws; and for other 
  1-25  purposes. 
 
  1-26       BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA: 
 
  1-27                           SECTION 1. 
 
  1-28  Title 48 of the Official Code of Georgia Annotated, relating 
  1-29  to revenue and taxation, is amended by striking paragraph 
  1-30  (14) of Code Section 48-1-2, relating to definitions of 
  1-31  terms, and inserting in its place a new paragraph to read as 
  1-32  follows: 
 
  1-33      "(14) 'Internal Revenue Code' or 'Internal Revenue Code 
  1-34      of 1986' means the United States Internal Revenue Code 
  1-35      of 1986 provided for in federal law enacted on or before 
 
 
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  2- 1      January 1, 1997 1998.  In the event a reference is made 
  2- 2      in this title to the Internal Revenue Code or the 
  2- 3      Internal Revenue Code of 1954 as it existed on a 
  2- 4      specific date prior to January 1, 1997 1998, the term 
  2- 5      means the Internal Revenue Code or the Internal Revenue 
  2- 6      Code of 1954 as it existed on the prior date.  Unless 
  2- 7      otherwise provided in this title, any term used in this 
  2- 8      title shall have the same meaning as when used in a 
  2- 9      comparable provision or context in the Internal Revenue 
  2-10      Code of 1986." 
 
  2-11                           SECTION 2. 
 
  2-12  Said title is further amended by striking subsection (i) of 
  2-13  Code Section 48-7-40, relating to tax credits for business 
  2-14  enterprises in less developed counties, and inserting in 
  2-15  lieu thereof the following: 
 
  2-16    "(i) Notwithstanding any provision of this Code section to 
  2-17    the contrary, in counties recognized and designated as 
  2-18    tier 1 the first through fortieth least developed counties 
  2-19    prior to January 1, 1994 in the tier 1 designation, job 
  2-20    tax credits shall be allowed as provided in this Code 
  2-21    section, in addition to business enterprises, to any 
  2-22    business of any nature for jobs created from January 1, 
  2-23    1993, through December 31, 1997." 
 
  2-24                           SECTION 3. 
 
  2-25  Said title is further amended by striking paragraph (2) of 
  2-26  subsection (c) of Code Section 48-7-40.2, relating to tax 
  2-27  credits for existing manufacturing and telecommunications 
  2-28  facilities or support facilities in tier 1 counties, and 
  2-29  inserting in its place a new paragraph (2) to read as 
  2-30  follows: 
 
  2-31      "(2) Any credit claimed under this Code section but not 
  2-32      used in any taxable year may be carried forward for five 
  2-33      ten years from the close of the taxable year in which 
  2-34      the qualified investment property was acquired, provided 
  2-35      that such qualified investment property remains in 
  2-36      service.  The credit established by this Code section 
  2-37      taken in any one taxable year shall be limited to an 
  2-38      amount not greater than 50 percent of the taxpayer's 
  2-39      state income tax liability which is attributable to 
  2-40      income derived from operations in this state for that 
  2-41      taxable year.  The sale, merger, acquisition, or 
  2-42      bankruptcy of any taxpayer shall not create new 
  2-43      eligibility in any succeeding taxpayer, but any unused 
 
 
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  3- 1      credit may be transferred and continued by any 
  3- 2      transferee of the taxpayer;". 
 
  3- 3                           SECTION 4. 
 
  3- 4  Said title is further amended by striking paragraph (2) of 
  3- 5  subsection (c) of Code Section 48-7-40.3, relating to tax 
  3- 6  credits for existing manufacturing and telecommunications 
  3- 7  facilities or support facilities in tier 2 counties, and 
  3- 8  inserting in its place a new paragraph (2) to read as 
  3- 9  follows: 
 
  3-10      "(2) Any credit claimed under this Code section but not 
  3-11      used in any taxable year may be carried forward for five 
  3-12      ten years from the close of the taxable year in which 
  3-13      the qualified investment property was acquired, provided 
  3-14      that such qualified investment property remains in 
  3-15      service.  The credit established by this Code section 
  3-16      taken in any one taxable year shall be limited to an 
  3-17      amount not greater than 50 percent of the taxpayer's 
  3-18      state income tax liability which is attributable to 
  3-19      income derived from operations in this state for that 
  3-20      taxable year.  The sale, merger, acquisition, or 
  3-21      bankruptcy of any taxpayer shall not create new 
  3-22      eligibility in any succeeding taxpayer, but any unused 
  3-23      credit may be transferred and continued by any 
  3-24      transferee of the taxpayer;". 
 
  3-25                           SECTION 5. 
 
  3-26  Said title is further amended by striking paragraph (2) of 
  3-27  subsection (c) of Code Section 48-7-40.4, relating to tax 
  3-28  credits for existing manufacturing and telecommunications 
  3-29  facilities or support facilities in tier 3 counties, and 
  3-30  inserting in its place a new paragraph (2) to read as 
  3-31  follows: 
 
  3-32      "(2) Any credit claimed under this Code section but not 
  3-33      used in any taxable year may be carried forward for five 
  3-34      ten years from the close of the taxable year in which 
  3-35      the qualified investment property was acquired, provided 
  3-36      that such qualified investment property remains in 
  3-37      service.  The credit established by this Code section 
  3-38      taken in any one taxable year shall be limited to an 
  3-39      amount not greater than 50 percent of the taxpayer's 
  3-40      state income tax liability which is attributable to 
  3-41      income derived from operations in this state for that 
  3-42      taxable year.  The sale, merger, acquisition, or 
  3-43      bankruptcy of any taxpayer shall not create new 
 
 
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  4- 1      eligibility in any succeeding taxpayer, but any unused 
  4- 2      credit may be transferred and continued by any 
  4- 3      transferee of the taxpayer;". 
 
  4- 4                           SECTION 6. 
 
  4- 5  Said title is further amended by striking subsection (c) of 
  4- 6  Code  Section 48-7-40.5, relating to income tax credits for 
  4- 7  certain approved retraining programs, and inserting in its 
  4- 8  place a new subsection (c) to read as follows: 
 
  4- 9    "(c) Any tax credit claimed under this Code section for 
  4-10    any taxable year beginning on or after January 1, 1998, 
  4-11    but not used for any such taxable year may be carried 
  4-12    forward for ten years from the close of the taxable year 
  4-13    in which the tax credit was granted. The tax credit 
  4-14    granted to any employer pursuant to this Code section 
  4-15    shall not exceed 50 percent of the amount of the 
  4-16    taxpayer's income tax liability for the taxable year as 
  4-17    computed without regard to this Code section." 
 
  4-18                           SECTION 7. 
 
  4-19  Said title is further amended by adding a new Code section 
  4-20  immediately following Code Section 48-7-40.14, relating to 
  4-21  calculation of new full-time jobs, to be designated Code 
  4-22  Section 48-7-40.15, to read as follows: 
 
  4-23    "48-7-40.15. 
 
  4-24    (a) As used in this Code section, the term: 
 
  4-25      (1) 'Clean fuel' means methanol, ethanol, or other 
  4-26      alcohols; any mixtures containing 85 percent or more by 
  4-27      volume of methanol, ethanol, or other alcohols with 
  4-28      gasoline or other fuels; reformulated gasoline or 
  4-29      diesel; natural gas; liquefied petroleum gas (propane); 
  4-30      hydrogen; electricity; and any other fuel used in a 
  4-31      low-emission vehicle that complies with the standards 
  4-32      and requirements applicable to such vehicle when using 
  4-33      such fuel or power source. 
 
  4-34      (2) 'Conventionally fueled vehicle' means a motor 
  4-35      vehicle which is fueled solely by a petroleum based fuel 
  4-36      such as gasoline or diesel. 
 
  4-37      (3) 'Converted vehicle' means a motor vehicle that is 
  4-38      retrofitted to use a clean fuel and meets the emission 
  4-39      standards set forth for that class of low-emission 
  4-40      vehicles as defined under rules and regulations of the 
 
 
 
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  5- 1      Board of Natural Resources applicable to clean fueled 
  5- 2      fleets, as amended. 
 
  5- 3      (4) 'Covered area' means a geographic area designated by 
  5- 4      the United States Environmental Protection Agency in the 
  5- 5      Code of Federal Regulations as an area which has not 
  5- 6      attained or maintained the National Ambient Air Quality 
  5- 7      Standard for ozone in accordance with the federal Clean 
  5- 8      Air Act, as amended, or any county adjacent to a covered 
  5- 9      area. 
 
  5-10      (5) 'Fleet operator' means a person who operates a fleet 
  5-11      of ten or more motor vehicles and that fleet is operated 
  5-12      in a single covered area, even if the fleet motor 
  5-13      vehicles are garaged outside a covered area. 
 
  5-14      (6) 'Low-emission vehicle' means a motor vehicle which 
  5-15      is capable of operating on clean fuel and meets emission 
  5-16      standards as defined under rules and regulations of the 
  5-17      Board of Natural Resources applicable to clean fueled 
  5-18      fleets, as amended. 
 
  5-19      (7) 'Motor vehicle' means any self-propelled vehicle 
  5-20      designed for transporting persons or property on a 
  5-21      street or highway that is registered by the Motor 
  5-22      Vehicle Division of the Department of Revenue. 
 
  5-23    (b) A tax credit is allowed against the tax imposed under 
  5-24    this article to a taxpayer for the purchase or lease of a 
  5-25    new low-emission vehicle that is registered in a covered 
  5-26    area.  The amount of the credit shall be $1,500.00 per new 
  5-27    low-emission vehicle. 
 
  5-28    (c) A tax credit is allowed against the tax imposed under 
  5-29    this article to a taxpayer for the conversion of a 
  5-30    conventionally fueled vehicle to a converted vehicle that 
  5-31    is registered in a covered area.  The amount of the credit 
  5-32    shall be equal to the cost of conversion, not to exceed 
  5-33    $1,500.00 per converted vehicle. 
 
  5-34    (d) The credits granted under this Code section shall be 
  5-35    subject to the following conditions and limitations: 
 
  5-36      (1) All claims for any credit provided by subsection (b) 
  5-37      of this Code section shall be: 
 
  5-38        (A) Accompanied by a certification issued by the 
  5-39        automobile dealership where the new low-emission 
  5-40        vehicle was purchased or leased; and 
 
 
 
 
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  6- 1        (B) Made only by a taxpayer who is the ultimate 
  6- 2        purchaser or lessee of a new low-emission vehicle at 
  6- 3        retail; 
 
  6- 4      (2) In order to qualify for a tax credit in a particular 
  6- 5      calendar year for the lease of a new low-emission 
  6- 6      vehicle under subsection (b) of this Code section, the 
  6- 7      lease must be in effect prior to or on the last day of 
  6- 8      the calendar year in which the credit is claimed; 
 
  6- 9      (3) All claims for any credit provided by subsection (c) 
  6-10      of this Code section must be accompanied by a 
  6-11      certification issued by the Environmental Protection 
  6-12      Division of the Department of Natural Resources; 
 
  6-13      (4) Motor vehicles subject to the requirements imposed 
  6-14      upon fleet operators by the federal Clean Air Act, 42 
  6-15      U.S.C. Section 7401, et seq., as amended, and applicable 
  6-16      federal regulations are not eligible for any tax credit 
  6-17      under this Code section; 
 
  6-18      (5) Any credit claimed under this Code section but not 
  6-19      used in any taxable year may be carried forward for 
  6-20      three years from the close of the taxable year in which 
  6-21      a new low-emission vehicle was purchased or leased or a 
  6-22      conventionally fueled vehicle was changed into a 
  6-23      converted vehicle, provided that the applicable 
  6-24      certification required in paragraph (1) or (3) of this 
  6-25      subsection accompanies any such claim; and 
 
  6-26      (6) In no event shall the amount of any tax credit 
  6-27      provided in this Code section exceed the taxpayer's 
  6-28      income tax liability. 
 
  6-29    (e) The state revenue commissioner shall be authorized to 
  6-30    adopt rules and regulations to provide for the 
  6-31    administration of any tax credit provided by this Code 
  6-32    section. 
 
  6-33    (f) The Board of Natural Resources shall be authorized to 
  6-34    adopt rules and regulations to provide for: 
 
  6-35      (1) The specific standards and requirements for 
  6-36      low-emission and converted vehicles which shall be 
  6-37      consistent with the terms of this Code section; 
 
  6-38      (2) An approved certification form which shall be issued 
  6-39      by an automobile dealership which certifies the purchase 
  6-40      or lease of a new low-emission vehicle that is qualified 
  6-41      for a tax credit provided by this Code section; and 
 
 
 
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  7- 1      (3) The certification of any converted vehicle that is 
  7- 2      qualified to claim a tax credit provided by this Code 
  7- 3      section." 
 
  7- 4                           SECTION 8. 
 
  7- 5  (a) This section and Section 9 of this Act shall become 
  7- 6  effective upon its approval by the Governor or upon its 
  7- 7  becoming law without such approval. 
 
  7- 8  (b) Section 1 of this Act shall become effective upon its 
  7- 9  approval by the Governor or upon its becoming law without 
  7-10  such approval and shall apply to taxable years beginning on 
  7-11  or after January 1, 1998.  Provisions of the Internal 
  7-12  Revenue Code of 1986 which were as of January 1, 1998, 
  7-13  enacted into law but not yet effective shall become 
  7-14  effective for purposes of Georgia taxation on the same dates 
  7-15  upon which they become effective for federal tax purposes. 
 
  7-16  (c) Sections 6 and 7 of this Act shall become effective upon 
  7-17  its approval by the Governor or upon its becoming law 
  7-18  without such approval and shall be applicable to all taxable 
  7-19  years beginning on or after January 1, 1998. 
 
  7-20  (d) Section 2 of this Act shall become effective on January 
  7-21  1, 1999. 
 
  7-22  (e) Sections 3, 4, and 5 of this Act shall become effective 
  7-23  on July 1, 1998. 
 
  7-24                           SECTION 9. 
 
  7-25  All laws and parts of laws in conflict with this Act are 
  7-26  repealed. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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